A High Degree of Operating Leverage,other Things Held Constant,means That

question 54

True/False

A high degree of operating leverage,other things held constant,means that a relatively small change in unit sales will result in a large change in operating income.

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Definitions:

Complements in Production

Goods that are produced together in the production process; an increase in the production of one leads to an increase in the production of the other.

Wage

The fixed regular payment, typically calculated on an hourly, daily, or piecework basis, made by an employer to an employee for their labor.

Marginal Revenue Product Curve

A curve showing the additional revenue a firm earns by employing one additional unit of input, holding other factors constant.

Competitive Seller

A seller in a competitive market who takes the market price as given and whose output decision does not affect the market price.